River City Bank has raised $20 million in capital, joining a host of regional community banks that have bolstered their coffers in recent months.

Community banks have been raising capital, not only to shore up their reserves against bad loans, but to brace themselves for increased lending and a new round of mergers and acquisitions likely when the economy starts improving.

“A lot of experts predict, and I tend to agree, that there is going to be a tremendous amount of consolidation,” said David Taber, chief executive of American River Bankshares.

American River, parent of Sacramento’s American River Bank, raised $24 million in capital at the end of last year. Fresno-based Central Valley Community Bank, which has a branch in Gold River, raised $8 million in a private placement in December. And Portland, Ore.-based Umpqua Bank has raised $560 million through several stock offerings during the past year. Umpqua, which has 21 branches in the four-county region, also has bought three banks in deals assisted by the Federal Deposit Insurance Corp.

In the past year, nearly all bank acquisitions have been assisted by regulators. But those opportunities are winding down as most troubled banks have been closed.

The next wave of acquisitions is likely to be driven by the market, rather than regulators. And community banks such as River City are getting prepared.

“While we cannot be certain about the timing or even the occurrence of future acquisitions, this additional capital will allow us to take advantage of those opportunities as they present themselves, as well as organic growth opportunities” locally, said Steve Fleming, chief executive of River City Bank.

“After this crisis does settle down, there are going to be many bank mergers,” said Ray Davis, chief executive of Umpqua Holdings Corp., parent company of Umpqua Bank.

“There are going to be the operations that realize they have no earnings power, and they cannot cope with all the regulations. I don’t think most bankers even realize the extent of the new regulations and compliance that is required by the Dodd-Frank bill. It is a tsunami of regulation.”

The Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law in July. It’s estimated that the 2,300 pages of law will create some 5,000 pages of regulations.

“Regulations don’t seem to stop. It is going to be expensive to comply with all of them, and there is no doubt about that,” said Dan Doyle, chief executive officer of Central Valley Community Bank.

Although bank executives are raising money for expansion and acquisitions, they also are protecting themselves.

“Bankers do not want to be in the position in their next regulatory review where they are criticized,” Doyle said. “No one is certain what will happen in their next examination. There are some key ratios the regulators want to see, and they want to see some backstop behind that.”

For instance, bank examiners might take a more conservative approach to loan values and reserves, which could strip capital from the bank’s balance sheet.

“If you disagree with the regulators, they win. You lose,” Doyle said, adding that once a bank gets hit with a regulatory order, it becomes more expensive and more difficult to raise capital.

“It is harder to raise money if everyone knows you are under the gun,” he said.

The government’s response to the financial crisis has been to add numerous layers of regulations and reporting requirements. This places more of a burden on smaller banks, which have fewer footings over which to spread the cost.

Larger community banks are positioning themselves for expansion, which allows them to spread regulatory costs over a larger organization.

“When we have a crisis like this, there is a reaction, and rightly so. But sometimes the pendulum swings way too far out,” said Umpqua’s Davis. “We are looking to see what the new normal is going to be.”

But waiting for normal is likely to be a bumpy ride, especially for banks that are facing challenges.

“There is a general sense that some of the banks are getting weary. It is not a lot of fun for a lot of bank directors — and for a lot of executives,” Doyle said. “There are some banks that would like to exit.”

“We are seeing interest by the banks to raise money. They started raising money to do deals or to fill a capital shortage,” said Darren Tymchyshyn, bank analyst with Hot Creek Capital, a bank hedge fund in Reno.

The added capital will also help with mergers, but the economy — and the industry —will need to improve.

“At this point, there is a lot of talk about mergers, but it is mostly just talk,” Doyle said.

When the banks get more stabilized and there is less disruption in the markets, perhaps at the end of next year or in 2012, merger activity will accelerate, he said.